Li & Fung

HKCG's yield only 2.3% while Li & Fung offers 5.3% yield, which attractive "given its strong long-term growth prospects." HSB off 1.5% at HK$101.10, MTRC down 2.0% at HK$16.96, L&F down 3.7% at HK$13.58, vs HSI down 4.8% though HSBC down 5.4%.

Hong Kong's Li & Fung kept 'overweight' - Morgan Stanley Morgan Stanley maintained an ""overweight' stance on Hong Kong-based trading firm Li & Fung Ltd, along with a target price of 40.0 hkd, citing attractive valuation and prospect of market share gains. Li & Fung mostly exports to the US after sourcing various items globally. While acknowledging that the US retail environment is expected to continue to deteriorate, Morgan Stanley noted that Li & Fung's order flow remained strong, and that organic sales trends in 2007 were better than those seen in 2006 based on figures from the company's management. The investment bank said a persistently weak US retail sales environment could slow Li & Fung's top-line growth, but added that the company has historically been able to offset a poor retail environment with market share gains from weaker competitors. In addition, given Li & Fung's increasing scale and global network as well as the US retailers' focus on retail differentiation through greater proprietary and private label offerings, the company should continue to be an important strategic partner for its customers, it added. Morgan Stanley said its analysts are of the view that US retail sales growth this year will decelerate to 2.5 pct, below long-term trends but still far above 1 pct nominal growth seen in a recessionary scenario. Li & Fung shares closed the morning session up 0.80 hkd or 3.16 pct at 26. 15.

Li & Fung Target Raised To HK$35.30 Lehman Brothers raises Li & Fung's (0494.HK) target price to HK$35.30 vs HK$32.25; says investors shouldn't overplay U.S. slowdown concerns on company as it doesn't expect company's growth prospect to be derailed. Says U.S. holiday season got off to solid start with Kohl's (Li & Fung's largest customer) particularly above expectations, which "adds further comfort." Adds other positive factors such as ongoing value-enhancing M&A activity. Keeps Overweight for stock, which now down 2.9% at HK$29.75.

Li & Fung (0494.HK) down 4.6% at HK$30.35, tracking overall market sell off (HSI down 4.2%), after mixed October U.S. retail sales data, but guidance generally not "as bad as many feared", says UBS. But aware of threats to U.S. consumers from subprime crisis, and hence to L&F. Keeps Sell call, target price unchanged at HK$28.50 (25.2X 2008 PER). Psychological HK$30.00 level maybe immediate support, volume heavy at HK$529.7 million.